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Investing.com-- Spark New Zealand Ltd (NZ:SPK) said on Tuesday it will sell a 75% stake in its data center business to Australia’s Pacific Equity Partners in a deal that values the business at about NZ$705 million ($418.6 million).
Spark sees cash proceeds of about NZ$486 million from the sale, and could receive up to NZ$98 million more based on certain performance-based objectives.
Spark said proceeds of the sale will be used towards reducing its overall debt.
“As cloud and AI uptake continues to increase demand for data storage and compute
in New Zealand, the introduction of a capital partner secures a funding pathway to build out Spark’s planned 130MW+ data centre capacity development pipeline,” the telecommunications operator said in a statement.
Spark will move its data center assets and operations into a new standalone company with its own board, management team, and debt financing.
The sale still leaves Spark with some exposure to the data center industry, demand for which was seen rapidly increasing in recent years with the advent of artificial intelligence.
The sale is expected to complete by December 31.